Autumn Budget 2026 summary: What John Healey's first Budget means for your business
He called it a Budget for working people and for British businesses big and small, and said it will give the country some breathing space after what he described as global economic storms.
Here, we highlight the main issues for business owners, without political bias, from John Healey’s speech.
Overall
For sole traders and small businesses, the headline measures were a higher threshold for business rates relief, a bigger trading allowance, a new relief for founders, and a move to smaller, more regular Self Assessment payments. Households also receive help with energy bills this winter.
The economy is under pressure. The government’s official forecaster, the Office for Budget Responsibility, expects the economy to grow by 1.2% this year but only 1% next year, and inflation rose to 3.5% in September because of higher oil and gas prices.
Higher borrowing costs mean the government will pay £14 billion more in interest this year than expected. The Chancellor said his plans keep the public finances on track, and that the country will be back in the black within three years.
How the Budget is paid for
The Chancellor said everything in the Budget is fully funded. Banks will pay an extra 3% surcharge on top of the 25% corporation tax rate, starting in January 2027 and lasting 15 months. This is smaller than the 5% or 8% some had expected, and the money will pay for the immediate help with energy bills.
Higher taxes on gambling will pay for the business rates changes that support the high street. The limit for business asset disposal relief is also being cut, as explained below.
HMRC also gets extra funding and stronger powers to collect overdue tax, although it is not clear how much this will raise.
Wages
The National Living Wage and the National Minimum Wage will both rise by 3.9% from April 2027, benefiting 2.3 million of the lowest paid workers. The rise also applies to workers aged 18 to 20. If you employ staff, check your payroll settings ahead of April.
Business Rates
The Chancellor raised the threshold for Small Business Rates Relief from £12,000 to £18,000 of rateable value, which he said will take 70,000 businesses out of business rates altogether. He presented the change as support for retail, hospitality and leisure businesses and the high street.
If your premises have a rateable value between £12,000 and £18,000, it is worth checking your next bill.
Support for founders and the self-employed
The trading allowance, which lets people earn from a small venture without paying tax, rises from £1,000 to £3,000 from April 2027.
A new founders' relief will tax lifetime gains of up to £10 million at 10% for the founders of Britain's most successful firms. The Chancellor said the government should recognise that success and keep those people in the UK.
A new young entrepreneurs allowance will cover a year of living costs for young founders while they turn their ideas into businesses.
The British Business Bank will also double its funding commitments to women-led businesses to £200 million, alongside a new scale-up programme for female founders.
Self-employed fathers and partners will also become eligible for paid parental leave.
Self Assessment and tax compliance
The Chancellor said Self Assessment payments will be reformed so those affected pay smaller, more regular amounts, in line with most taxpayers, instead of larger bills that are harder to pay.
HMRC will also receive extra funding to improve compliance, along with stronger powers to collect overdue tax from people who can clearly afford to pay but ignore repeated contact.
Capital Gains Tax (CGT)
Business asset disposal relief reduces the tax you pay when you sell all or part of a business. The Chancellor is cutting the lifetime limit on gains that qualify for the relief from £1 million to £500,000 from April 2027, which he said means no change for three in four claimants. If you are thinking of selling a business, plan the timing and structure of the sale well in advance.
Energy, fuel and motoring
Twenty million households in council tax bands A to D will receive a £100 household energy payment this winter, paid directly into bank accounts at a cost of £2.6 billion.
The VAT cut on household electricity, from 5% to 0%, was due to end in March 2027 and has now been extended until July 2027, although it has not been made permanent. The gas standing charge will also be removed from 2027, with similar reforms promised for electricity.
The 5p cut in fuel duty has been extended again, until July 2027. For people who need their cars for work, the higher mileage rate rises from 25p to 35p per mile, and the increase to the standard mileage rate becomes permanent, helping anyone who claims mileage as a business expense.
Pensions and savings
Under a new Pension Tax Allowance, pensioners with income up to the value of the full new State Pension will not pay income tax during this Parliament.
Healey confirmed that the tax-free cash ISA allowance will stay at £20,000 a year, so the planned cut to the cash ISA limit will not go ahead. He also said the government will work with the sector on a new Starter ISA to make investing more accessible.
Housing and first-time buyers
A First Time Buyer ISA will replace the Lifetime ISA. The Chancellor said he will address the Lifetime ISA withdrawal penalty so that if the home you want costs more than the limit, you get back at least what you put in.
A new Your First Home scheme will help first-time buyers without family money behind them. It is an equity loan scheme starting in spring 2027, funded with £4.7 billion of government-backed lending.
State Pension and careHealey confirmed an adjustment to the triple lock and the creation of a new National Care Service. He said the changes will save £15 billion a year by the end of the 2030s and £50 billion by 2050, and that a rising State Pension alongside the care service will take the burden off families and the NHS.
Devolution and other announcements
Healey said local areas will keep more of the tax they raise, with 100% of business rates retained locally by the end of the decade. From 2027, 20% of business rates revenue will go to mayors, and from 2028 they will also get a share of income tax receipts. Mayors and some other local authorities will also be able to charge visitors a levy for overnight stays from 2028.
The government also said it will act soon on pay transparency in job adverts to help close the gender pay gap, which employers should keep an eye on.
What the Budget means for sole traders and small businesses
For sole traders, the higher trading allowance and the move to smaller, more regular Self Assessment payments are the changes to look at first, because they affect how much tax you pay and when.
Business owners with premises should check their rateable value against the new £18,000 threshold, and anyone planning to sell a business should look at the lower business asset disposal relief limit.
If you would like to read the full facts, the Budget statement and supporting documents are available on the Gov.uk website.
Next Steps
If you would like to talk through how the Budget affects your business or your personal finances, please call the office on 01473 657853 to arrange a convenient time to chat.